Winding down your business or shutting up shop is a bit more involved that simply taking down your website or putting a closed sign on the door. While the jurisdiction you live in and your business’ incorporation will both greatly impact what steps you should take, there are some standard processes that should be adhered to by all types of businesses.
You should start by reviewing your company’s Articles of Incorporation to find out what steps are necessary to take in order to dissolve your business. Doing so may require you to give written notification or to hold a vote and for two-thirds of the company’s shareholders to consent in order to move forward with the dissolution.
The next step in the business dissolution process involves filing your a Certificate of Dissolution with Utah’s Secretary of State. In doing so, you may be asked to file a ‘tax clearance’ letter along with your Articles of Dissolution. This will certify that there’s no outstanding taxes due.
Next, you’ll need to contact the Internal Revenue Service (IRS) to file a Form 1065. It’s necessary to file it within three months of your company’s closure. After filing that form, you’ll need to continue paying payroll, capital gains, and liquidation, as well as both quarterly and annual taxes for both the current and previous year. Local and state tax authorities have their own business tax obligations as well.
It’s only after you’ve completed the aforementioned steps that you’ll want to cancel your business license. At this point, you’ll also want to contact your creditors and let them know that you’re going out of business. You’ll need to provide them with a mailing address and a time frame during which all outstanding claims should be filed.
The remaining steps in the business dissolution process include settling creditor debts and collecting monies owed to the business. If your company has shareholders, then it’s important to let them know about the company’s dissolution. After all debts and incoming monies have been received, the company’s assets should be sold and divided up between partners or company owners.
The corporate dissolution process is referred to “winding down operations” largely because it’s not a simple one-step process. A St. George business organization attorney can guide you as you look to shut down operations of your company in accordance with local, state and federal laws.
Source: FindLaw, “Necessary steps to dissolve your company,” accessed Oct. 27, 2017